When Ads Aren’t Human: India’s Draft AI Advertisement Labelling Guidelines Explained

Introduction

With the prevalence and availability of AI products, brand owners are extensively using AI for various purposes for improving efficiency and reducing costs. One of the major areas where we’re witnessing usage of AI is for creating various aspects of advertisements which might otherwise be expensive if celebrities/influencers were to be engaged or where the advertisements would need to be shot at expensive locations. With the usage of AI for advertisements, there is a major concern regarding insufficient disclosures to consumers which could lead to uninformed decisions on their part.

Aligning with the 2026 amendments to the IT Rules, 2021 which provide for regulation surrounding Synthetically Generated Information, the Advertising Standard Council of India (ASCI) has published draft guidelines for labelling of AI generated advertisements. Instead of issuing a blanket order of labelling of all AI generated advertisements, the draft Guidelines have adopted a risk-based assessment framework. In order to assess whether or not a labelling requirement is there, brand owners should assess the following aspects:

• Where AI use is central to an ad’s persuasive messaging or materially influences purchase decisions, does it mislead consumers about the product’s claims, performance, or benefits?
• Would the absence of a disclosure create a false or misleading impression of the product’s claims or benefits?

Keeping in mind the aforementioned factors and the risk to consumer judgment, the draft Guidelines have elaborated instances where AI is prohibited to be used for advertisements, where labelling requirements are mandatory and where no labelling requirement is there.

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1. High Risk (Prohibited Content)

Advertisements which are illegal, infringe on rights of consumers, make misleading claims, or generally violate the ASCI Code fall under this category. These advertisements are not permissible to be published even if AI labels are displayed.

The Draft Guidelines provide a few examples of such advertisements:

• Advertisements fabricating endorsements or testimonials.
• Advertisements which exaggerate product results or features through claims or visual representations to create a misleading impression.
• Advertisements which create fake locations that appear realistic to the consumer.
• Advertisements which use deepfakes, copyrighted work or a person's likeness without consent.
• Advertisements which use AI to generate fictional authority figures with identifiable cues, such as an AI generated fake doctor promoting a supplement, implying medical endorsement/expertise.

2. Medium Risk (Labelling Required)

Advertisements under this category are ones where usage of AI materially influences consumer decisions and where lack of disclosures would mislead consumers. Labelling is mandatory for such advertisements as these would help consumers to understand the nature of representation in order to make an informed decision.

The draft Guidelines provide a few examples of such advertisements:

• Advertisements which use AI for virtual or synthetically generated influencers and ambassadors.
• Advertisements which use AI to replicate a real person's likeness or voice (even with their consent) for personalized messaging.
• Advertisements which involve usage of synthetically generated visuals for product performance unless the visuals replicate how the product actually performs.
• Advertisements which use AI for creation of realistic events, settings or situations.
• Advertisements which use AI for demonstrating a product that does not currently exist.
• Advertisements which involve usage of AI for generating exaggerated sound effects that are highly relevant to the product's core features.
• Advertisements which use AI for paid or sponsored product suggestions, must specifically be labelled ‘sponsored by’.

3. Low Risk (No Labelling Required)

Advertisements which feature minor modifications or use AI for aspects which have no material impact on a consumer’s ability to make an informed choice fall under this category.

The draft Guidelines provide a few examples of such advertisements:

• Advertisements which involve usage of AI for minor enhancements such as routine editing, colour correction, noise reduction, standard blemish removal and minor lighting tweaks that do not alter the substance or core claims.
• Advertisements which contain AI generated/altered background and ambient elements such as purely decorative AI-generated backgrounds, abstract skylines, ambient music, jingles, or background sound effects that are unrelated to the product's actual capabilities or promise.
• Advertisements which contain AI generated fantastical elements such as obvious, unrealistic effects which can be generally recognized as not depicting reality.
• Advertisements which involve usage of AI for administrative and text uses such as generating or enhancing advertising copy, creating audio descriptions for the visually impaired or preparing documents in good faith without creating false records.

Manner of Display of Disclosure Labels

The draft Guidelines prescribe a requirement of display of labels in respect of Medium Risk advertisements. The appropriate labels suggested by the draft Guidelines include “Audio/Video created using AI” or “Audio/Video enhanced using AI”. The draft Guidelines, however, provide relaxation to advertisers to use any other alternative labels which would accurately inform the consumer about usage of AI in such advertisements.

In addition to the AI labels, it has also been clarified that disclaimers should also follow the ASCI Code on disclaimer guidelines (wherever applicable). Further, synthetically generated advertisements in some cases may be considered misleading or objectionable regardless of labels, if the end effect is likely to mislead or harm the consumer and wouldn’t be considered permissible if they generally violate the ASCI Code.

Conclusion

The step taken by ASCI by publishing these draft Guidelines seems to be a promising one particularly given that the Government has also recently taken steps for regulating synthetically generated information in the digital domain. Since there is potential for harm being caused to consumers through AI generated information by portraying an unrealistic outcome of a product/services, usage of deepfakes (which is quite prevalent) or even through portraying unauthorized endorsements, there was a much-needed requirement for regulation of synthetically generated advertisements.

Comments to the draft Guidelines can be submitted to ASCI until June 13, 2026.


This content is originally posted here: https://www.ahlawatassociates.com/blog/ai-advertisement-labelling-rules-india